Stearns Examines Piracy and Counterfeiting of American Products in China

STEARNS EXAMINES PIRACY AND COUNTERFEITING OF AMERICAN PRODUCTS IN CHINA

PANEL FOCUSES ON TRADE RELATIONS WITH CHINA AND PROTECTING INTELLECTUAL PROPERTY RIGHTS

"Since establishing diplomatic relations with China in 1979, U.S.-China trade has risen from $5 billion in 1980 to $231 billion in 2004," said Rep. Cliff Stearns (R-FL), Chairman of the Commerce, Trade & Consumer Protection Subcommittee. "Although bilateral trade is increasing, last year we ran a trade deficit of $162 billion. The United States enjoys global preeminence in trade related to innovations, new technologies, and entertainment, which depends on protecting intellectual property rights (IPR). A recent estimate placed the loss of sales in China by American copyright firms at between $2.5 and $3.5 billion in 2004. It is vital to our economic interests to press China to improve the protection of IPR."

The subcommittee today heard testimony from Jon W. Dudas, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office. Dudas outlined the Administration's efforts to improve China's protection of IPR. Dudas identified one specific problem area, "China, it should be noted, does not lack for quantitative enforcement. Each year, tens of thousands of enforcement actions are undertaken. However, these actions are typically pursued by administrative agencies, which impose non-deterrent penalties. This Administration has been pressing China to impose prison sentences and/or stiffer fines on violators of IPR since fines and other penalties imposed are too modest and provide little or no deterrence."

Dudas described areas where piracy and counterfeiting have been reduced, "Between 2001 and 2002, the software industry estimates that software piracy in Indonesia decreased from 89 percent to 68 percent. In South Africa, it fell from 63 percent to 36 percent. There is some reason for optimism."

"I appreciate the Administration's efforts to reduce pirating and counterfeiting of American products, but as you note, there is far more to be done," concluded Stearns. "I will continue to monitor progress in this area. I ask that you encourage Secretary Gutierrez (Secretary of Commerce), when he goes to China to discuss trade issues with the Premier, that he visit the shops behind the American embassy there - that will give him a good idea of the level of piracy and counterfeiting occurring in China."

http://www.house.gov/stearns/PressReleases/PR2005Releases/pr-050609-ChinaTrade.html